COIMBATORE: Nearly two years after Finance Minister Arun Jaitley made a key announcement to bridge the chasm between the Skill India ideal and the Make in India dream through Pradhan Mantri Vidya Lakshmi Karyakram, the Union government took the giant leap by making the Vidya Lakshmi portal the sole nodal point to process all applications for educational loans.
In a letter dated April 21, the Union Ministry of Finance directed financial institutions to start processing all educational loans through the Vidya Lakshmi portal. This means that students hitherto queuing up in front of bank-loan desks would now be able to avail educational loans at the click of a mouse.
All that students would now have to do is register themselves on the portal, fill a Common Education Loan Application Form (CELAF) and apply to multiple banks. The banks in turn would have to upload the status of the application in real-time, resulting in better response time.
Once sanctioned, loans would be disbursed outside the portal through the bank directly to the applicants. Besides, this would help the government have definitive data on loan status.
A Kanagaraj, lead bank manager in Coimbatore, says, “All banks have been instructed to follow the new process. Now that the system is in place, awareness should be raised among prospective customers.”
While the push was long overdue, bankers are skeptical whether it would help breathe fresh life into their off-colour balance sheets as educational loan beneficiaries form the highest percentage of Non-Performing Assets (NPAs) across all sectors in the State.
According to the State Level Bankers Committee’s Tamil Nadu report in the third quarter of 2016, NPAs among education loan beneficiaries were at 49.02 per cent. However, in terms of absolute figures, the amount was a lowly Rs 1.25 crore. In the last quarter, the percentage fell to 48.79, with the absolute figure pegged at Rs 1.21 crore.
So what’s in store for the prospective customers? A Murugan, a father of two, sums it up: “For my daughter, in third year now, I had to run from bank to bank in search of a loan. When it was finally sanctioned by a nationalised bank, it was only Rs 25,000 as against the request of Rs 1 lakh. I hope I will not have to undergo the same trauma when my son passes out of Class XII this year.